Muni sweeps: Investing in shared infrastructure

Investing in shared infrastructure

My favorite article this week is by William Alden of the Huffington Post. He brings out an element of the municipal bond market that I’ve long believed could be the future of muniland: the propensity of people to invest in projects and entities that they have a first-hand experience or a connection to.

War bonds, issued to pay for World War I and II, are a case in which investors moved their savings to particular investment products for emotional, social or patriotic reasons.

Alden highlights a new retail bond program I hadn’t heard of yet (emphasis mine):

Massachusetts’ new program, Build Mass Bonds, will offer $1,000 bonds to individual investors during a special order period this coming weekend. The state hasn’t offered a bond that small in more than two decades, according to a release.

The Massachusetts Treasury invoked a sentimental sense of allegiance to the state.

Muni sweeps: Garden State warning

Fitch Ratings goes “negative” on New Jersey

New Jersey is a wealthy state with lots of industry, excellent higher education institutions and is a “bedroom community” for New York City. But still it faces substantial fiscal problems.

Dow Jones reports that Fitch Ratings has cracked the whip and put the state on “negative” watch. This is the same move that Standard & Poors made on the debt of the United States. Think of it as a shot across the bow. Generally within six months a rating agency will downgrade the issuer or remove the “negative” designation.

From Dow Jones:

Fitch Ratings lowered its outlook on New Jersey’s bonds to negative, citing concern regarding the state’s mounting budgetary pressure amid a significant and growing unfunded pension liabilities, particularly in the context of an already high debt burden.

Muni sweeps: Strutting her stuff

Philly mummers 2009

She may not be the prettiest girl but at least she’s out there

The home of the famous Mummer’s parade struts its stuff for the bond markets.

The city of Philadelphia was named tops for transparency in a University of Illinois at Chicago survey of cities providing investors with financial information online.

Every municipality, like every person, has problems. Hiding them doesn’t instill confidence in investors. I’m glad to see Philly and other cities letting it all hang out. From the the Philadelphia Inquirer:

Muni sweeps: Christie’s battles are not credit positive

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We are a nation of states with differing political cultures and leaders.  Loud leaders and quiet leaders.

The loud ones get most of the attention. Do financial markets reward the loud ones too?  Not always it seems.

New Jersey Governor Chris Christie gets a lot of attention for his approach to governing. And has garnered a lot of political interest for his full-on attack on his state’s municipal unions. See the video above for an example.

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